Bank Board Bureau to Improve Banks Governance

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New Delhi (ABC Live): With a view to improve the governance of Public Sector Banks (PSBs), the Government has decided to set up an autonomous Bank Board Bureau (BBB).

The Bureau will search and select heads of Public Sector Banks and help them in developing differentiated strategies and capital raising plans through innovative financial methods and instruments. The BBB is proposed to start functioning from 1st April, 2016.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

The Public Sector Banks (PSBs) play a vital role in India’s economy.  In the past few years, because of a variety of legacy issues including the delay caused in various approvals as well as land acquisition etc., and also because of low global and domestic demand, many large projects have stalled.  Public Sector Banks which have got predominant share of infrastructure financing have been sorely affected. It has resulted in lower profitability for PSBs, mainly due to provisioning for the restructured projects as well as for gross NPAs.

The present Government has put in place a comprehensive framework for improving PSBs. Most recently, we have made the announcement of capital allocation by Government for PSBs in the next four years.